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Author Topic: Who is playing the stonewalling game? Or is it something else..  (Read 1637 times)
Justsomeforumuser
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June 30, 2011, 05:20:08 PM
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I am not sure if anyone has noticed, but ever since the reopening of MtGox, there have been literally insane BTC placements, both on bids as well as on offers.

Now, I could understand the offer side; there are various BTC millionaires who might want a steady trickle for cashing out.

But someone is constantly placing and replacing buy orders (single line orderbook entries) for 2-5000 BTC x 14-16$ (as well as staged 5xx BT increments), i.e. over $70k worth.

Now, not everyone has that much spare cash to throw around just as speculation / could-lose-all money.

So, my first thoughts were: Who is this? Is this just one guy or several? Are people trying to "launder" their money?
What's going on?

Then I thought about both use and abuse fantasies, such as: There have been complaints that the price isn't steady and that this is detrimental to people who might want to look at it for business.
What if some of the early adopters with a few hundred thousand BTC in their pockets made a pact to "stonewall" / "fence" prices in between a window, say 14-18$, or maybe an only sloooowly sliding window (say 0.1$ more a day?) where they cash-in/out in order to keep price contained?

Which, of course, lead to the next thought: What if the theoretical market-cornering theory of a few powerful players is actually playing out? I.e. they put in buys so huge that the market literally can't get past them, and then place sells 1-5$ over their bottom-barrier, thus continually ping-ponging market price between the bounds and making 10-30% profit each time.

What I mean to say is: I don't believe that this is the "same" market as before the MtGox hack. I think something happened, changed or came into the market, and I'm basically asking whether anyone knows anything or anyone who is putting up these sums.


(And no, I won't believe you if you have a 300+ pixel banner saying GOX'd lulz and claiming you're the BTC millionaire doing it for shits and giggles and have I seen the BTC is going to 1000000$ thread yet)


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Jaime Frontero
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June 30, 2011, 05:24:41 PM
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it is interesting, isn't it?

and, on top of it all, i've read somewhere on the forum that MtGOX has exposed their darkpools.

all i can think of is that it is absolutely sure not to last.

but i agree with you:

Quote
I don't believe that this is the "same" market as before the MtGox hack.
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June 30, 2011, 05:33:14 PM
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If that is the case, this was starting to happening before the hack. The week before the hack the price deathly level at $20 for a few days. Completely flat. If this is happening, I think you overestimate the spread. I think they are bouncing us between $16.75 and $17. I believe someone big is cashing out at the $17 level, and picking up and coins he can at around $16.75.

Then again our google trends are in a lull,

http://www.google.com/trends?q=bitcoin&ctab=0&geo=all&date=ytd&sort=0

This has been highly correlative with price, see my post from a few weeks ago, the current lull does put us right at $17:

http://forum.bitcoin.org/index.php?topic=17318.0

I think the price will start moving up when our trend improves. As soon as bitcoin starts getting some noise in more mainstream places the price is going places.

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dinzy
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June 30, 2011, 05:44:58 PM
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Is anyone interested in joining forces to mess with these people, if they really exist? 

If a bunch of traders 'pool' money by trading in  we can move the market.  I'll put my money where my mouth is.
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June 30, 2011, 05:46:47 PM
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If that is the case, this was starting to happening before the hack. The week before the hack the price deathly level at $20 for a few days. Completely flat. If this is happening, I think you overestimate the spread. I think they are bouncing us between $16.75 and $17. I believe someone big is cashing out at the $17 level, and picking up and coins he can at around $16.75.

Then again our google trends are in a lull,

http://www.google.com/trends?q=bitcoin&ctab=0&geo=all&date=ytd&sort=0

This has been highly correlative with price, see my post from a few weeks ago, the current lull does put us right at $17:

http://forum.bitcoin.org/index.php?topic=17318.0

I think the price will start moving up when our trend improves. As soon as bitcoin starts getting some noise in more mainstream places the price is going places.


yes - i agree.

unfortunately, bad news sells - and we seem to have gotten Bitcoin into a more secure place where there is much less of that bad news.  some kind of noise about how Facebook Credits are a huge ripoff compared to Bitcoin... that might be good.

* sigh * everything on the 'net always goes back to google - and they are shortly to be the competition.  tougher...
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June 30, 2011, 06:12:59 PM
 #6

What I mean to say is: I don't believe that this is the "same" market as before the MtGox hack.

One factor is that with difficulty lower, miners who haven't added mining capacity are now earning fewer BTC per day.  For some, the bitcoin income they were receiving was going towards their mining hardware and some was being stocked away.  Now with the higher difficulty combined with a flat or lower BTC/USD, miner's are are selling more of what they produce as before when the exchange rate was clearly on an upward slope.  Some are even selling off what they previously had been saving.

Do realize that 7,200 BTC or more are "minted" each day.  In the past 24 hours, according to BitcoinWatch.com there were 9,000 BTC (180 blocks @ 50 BTC each) issued so if the price remained level at $17 that means over $150,000 worth of new inflows came into bitcoin or that there was $150,000 worth of hoarding, or some combination of those two.

Then again our google trends are in a lull,

To me, the amount of speculative interest that results from the media coverage is not worth much as that is not sustainable.  Instead the metrics that matter most are the number of transactions per day (currently around 11K) and the BItconDays Destroyed metric (currently about 36%).

I'm still trying to see if a pattern exists between changes in BDD versus the market exchange rate.  BDD rose quickly (meaning many "old" BTCs move) over the past week but that doesn't say if that was simply coins finding a safe harbor or it was transfers to the exchanges in preparation for selling.  Just know there are a lot of coins moving around -- with even a 20% turnover now equating to a "slow day".

The fact that the exchange rate has barely moved makes these movements even that much more curious.

[edited]

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June 30, 2011, 06:32:50 PM
 #7

the BItconDays Destroyed metric (currently about 36%).

I'm still trying to see if a pattern exists between changes in BDD versus the market exchange rate.  BDD rose quickly (meaning many "old" BTCs move) over the past week but that doesn't say if that was simply coins finding a safe harbor or it was transfers to the exchanges in preparation for selling.

[edited]

can u elaborate on this?
Stephen Gornick
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June 30, 2011, 10:42:31 PM
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the BItconDays Destroyed metric (currently about 36%).

can u elaborate on this?

For a number of different reasons which likely include mixing (http://en.bitcoin.it/wiki/Mixing_service)  the number of bitcoins sent in a day appear to be a much larger number than what likely is truly being transferred.   Other payment systems know to the penny how much was transferred in and out and they use that metric in measuring growth, for instance.

With the total coins sent being a number that so badly misrepresents the total transferred those wanting statistics on Bitcoin had to come up with an alternate method.  The BitcoinDays Destroyed metric was devised to help show how the currency is used and is about the closest possible method to the total transfers metric that competing services report.

Essentially the BitcoinDays Destroyed increases when coins that had previously not moved start moving.  The older they are, the more "days destroyed" when they are eventually spent.  Re-spending those shortly after will have a tiny amount of "days destroyed" because they weren't idle for long.

 - http://en.bitcoin.it/wiki/Bitcoin_Days_Destroyed
  

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June 30, 2011, 11:10:17 PM
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What if some of the early adopters with a few hundred thousand BTC in their pockets made a pact to "stonewall" / "fence" prices in between a window, say 14-18$, or maybe an only sloooowly sliding window (say 0.1$ more a day?)

I thought about this before. The conclusion:
Such a "stonewall" can only be sustained for so long. Whoever tries this will slowly drain their coin supply until they eventually dry out. After that the price will shoot through the roof because the artificial "suppression" will suddenly give way.

Alternatively they can act to slowly increase the price which might provide some stability until, again, they run dry.
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June 30, 2011, 11:18:28 PM
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Have a look at the bitcoin users map:
http://i.imgur.com/WfNa4.png

It might be that we nearly exhausted the supply of early adopters in Europe and USA. Now we either have to establish a real market so the early majority can join in to buy goods for Bitcoins, or we can hope that the Asian press (mainly in Japan, China, India) notices Bitcoin thus drawing their early adopters in.

Check out my other articles on the forum:
"The Bitcoin Establishment Plan: How to talk about Bitcoins properly"
http://bit.ly/k6LRkM
"Solution: How to shift the decimal"
http://bit.ly/m0N0H4
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June 30, 2011, 11:37:20 PM
 #11

Have a look at the bitcoin users map:
http://i.imgur.com/WfNa4.png

It might be that we nearly exhausted the supply of early adopters in Europe and USA. Now we either have to establish a real market so the early majority can join in to buy goods for Bitcoins, or we can hope that the Asian press (mainly in Japan, China, India) notices Bitcoin thus drawing their early adopters in.
Indeed. Bitcoin must go from theory to practice. Other experiments will follow, but it's doubtful that any other virtual currency scheme will have the mettle to withstand the attacks and scrutiny that bitcoin can endure.

Any significantly advanced cryptocurrency is indistinguishable from Ponzi Tulips.
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